Which of These Newspaper Stocks Will Die?

According to our 115,000-plus Motley Fool CAPS community, these, in order, are the worst five newspaper stocks in the world (at least of those tagged here):

Worst Newspaper Stocks

Recent Price

CAPS Stars

(Out of 5)

One-Year Return

McClatchy (NYSE: MNI  )

$4.34

*

(76.5%)

New York Times (NYSE: NYT  )

$13.05

*

(30.9%)

Thomson Reuters (Nasdaq: TRIN  )

$124.57

**

(72.3%)

Gannett (NYSE: GCI  )

$14.98

**

(65.2%)

Washington Post (NYSE: WPO  )

$508.95

**

(36.5%)

Sources: CAPS, Yahoo! Finance.

Jim Cramer would probably tell you to sell them all. He may be right. But, for now, I want to focus on the one that our Foolish stock pickers say is the worst: McClatchy.

"MNI buried in an industry that is in dire need of transformation," wrote top bear pitcher NLP49 in July. "Although circulation numbers remain pretty strong advertising, the bread-and-butter of newspapers, continues to decline. 5 years down the road this could be a totally different, and profitable company, but I suspect it'll take a bankruptcy and industry transformation to a fee-based internet subscription service to do so."

Interesting, but even that may not be enough. Gawker Media founder Nick Denton is cutting his workforce by 15% to account for lower advertising revenue over the next year, VentureBeat reports. If Gawker and its blog network, which attracts some 20 million unique visitors per month, is cutting back, how bad must it be for McClatchy and its high-cost, low-margin, ink-stained peers?

And remember: With the credit crunch crunching all lenders -- from Goldman Sachs (NYSE: GS  ) to Wells Fargo (NYSE: WFC  ) -- there's likely to be less access to capital for leveraged behemoths like McClatchy, whose debt already exceeds 84% of total capital. Not good.

But that's my take. What's yours? Do you think McClatchy will be the next newspaper company to fail? Let us know by signing up for CAPS today. It's 100% free to participate.

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Fool contributor Tim Beyers has written for two newspapers but owned shares in none of the companies mentioned at the time of publication. He hunts for the best of tech as a member of the Motley Fool Rule Breakers team. Here's how to try this market-beating service free for 30 days. Get access to all of Tim's Foolish writings here.

The Motley Fool's disclosure policy should be read all over Wall Street.


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